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02 Regulations of the Supreme People's Court on Issues Involving Trial of Administrative Cases Concerning Decisions on Ownership of Trademark

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16 Application of the Doctrine of Stare Decisis to Cases of Well-Known Trademark Recognition

20 Consideration of Malicious Intentions of Trademark Applicant in Protection of Prior Used Trademark

23 Factors to be Considered for Judging "Other Negative Influences"

26 Principles of On-Demand Recognition of Well-Known Trademarks and Consistent Law Application

30 Strengthening Protection of Well-Known Trademarks

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May 2017

Regulations of the Supreme People's Court on Issues Involving Trial of Administrative Cases Concerning Decisions on Ownership of Trademark

The Regulations, adopted by the 1703 rd Meeting of the Judicial Committee of the Supreme Court on December 12, 2016, is now published and come into effect on March 1, 2017.

2017 Judicial Interpretation No.2

According to Trademark Law of the People's Republic of China and Administrative Procedure Law of the People's Republic of China, combined with judicial practice, the Regulations is established to correctly trial administrative cases concerning decisions of ownership of trademk Article 1 The so-called administrative cases concerning decisions of ownership of trademark in the present Regulations refer to those wherein the counterpart or an interested party is dissatisfied with the administrative decision of the Trademark Review and Adjudication Board of the Administration for Industry and Commerce under the State Council (Hereinafter referred to as TRAB), such as review on refusal, review of disapproval of registration, review of non-use cancellation, invalidation and review of invalidation, and files a lawsuit to a People's Court. Article 2 The scope of trial by the People's Court for the administrative cases concerning decisions of ownership of trademark is generally determined by the claims and grounds of the plaintiff. The People's Court may investigate and judge the subject matter after the statement of all the parties where obvious impropriety exists in the decisions by the TRAB.

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May 2017

Article 3 "Those identical with or similar to the State name of the People's Republic of China;" in Article 10.1.1 of the Trademark Law refers to the trademarks as a whole identical with or similar to "the State name of the People's Republic of China For those containing yet as whole not identical with or similar to "the State name of the People's Republic of China", People's Court may judge according to Article 10.1.8 of the Trademark Law where they may be detrimental to national dignity as registered trademarks. Article 4 For "those having the nature of fraud, being liable to mislead the public about the characteristics of the goods such as the quality or the place of origin", where the TRAB consider the situation be applied to Article 10.1.7, it is supported by the People's Court. Article 5 For "those detrimental to socialist morals or customs, or having other unhealthy influences", the People's Court may judge according to "other unhealthy influences" in Article 10.1.8 of the Trademark Law.

The situation where the names of public figures in the fields of including but not limited to political, economy, culture, religion and nationality are applied for registration as trademarks is applied to the aforesaid "other unhealthy influences". Article 6 For trademarks consisted of the geographical names of administrative divisions at or above the county level and foreign geographical names well-known to the public, where they are distinct from geographical names in overall meaning, the People's Court should not consider the situation be applied to Article 10.2 of the Trademark Law.

Article 7 When determining the distinctive characteristics of a disputed trademark, the People's Court shall consider the trademark as a whole according to the common sense of the relevant public of the designated goods. Where descriptive characteristics in a trademark will not affect its distinctive characteristics as a whole, or the descriptive characteristics is expressed in a unique way, while the relevant public are able to identify the goods source, it shall be considered distinctive.

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May 2017

Article 8 Where a disputed trademark is in a foreign language, the People's Court shall judge whether the trademark is distinctive according to the common knowledge of relevant public within the territory of China. Where the inherent meaning of the foreign language contained in a trademark may affect its distinctiveness when used on the designated goods, while the relevant public have a low awareness of such inherent meaning and are able to identity the goods source, it shall be considered distinctive.

Article 9 Where a three-dimensional sign applied for trademark registration merely indicates the shape or a part thereof inherent in the nature of the goods concerned, and the relevant public are not able to identify it as the sign of source of its designated goods, it does not have distinctiveness as a trademark

That the aforesaid shape is created originally or used first by the applicant will not certainly generate the distinctiveness of the trademark

The sign in Paragraph 1 may be considered distinctive where the relevant public are able to identity the goods source by it after long term or wide use.

Article 10 Where a disputed trademark is the generic name of goods by law or established by use, the People's Court shall consider it as a generic name according to Article 11.1.1 of the Trademark Law. A trademark shall be considered as a generic name where it is a generic name according to national or industrial standard, or where it is considered by the relevant public to represent a kind of goods. Where it is listed as the generic name of goods by books such as a professional reference book and dictionaries, it may be as a reference to considering it as a generic name.

An established generic name is judged based on the common knowledge of the relevant public in a nationwide scale. The people's court may consider a product name as a generic, as it is used in the related market of fixed goods originated from factors such as historical tradition, customs and geographic circumstance.

The applicant of a disputed trademark knows or shall know his trademark as an established name of goods in some region, the People's court shall consider it as a generic name.

Generally, the People's Court judges a generic name of a trademark according to the de facto status at the application date of the trademark. Where the de facto status changes at the registration, the de facto status at registration shall be the basis for judgement.

Article 11 The people's court shall consider it applied to the situation in Article 11.1.2 of the Trademark Law where signs merely indicate the quality, principal raw materials, function, use, weight, quantity or other features of the goods in respect of which the signs are used. That the trademark or other composing elements indicate the characteristics of the goods yet not affecting its function as source identifier of goods is not applied to the situation whereof.

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May 2017

Article 12 Where a litigant claims a disputed mark as a reproduction, imitation, or translation of a well-known trademark of another person not registered in China shall not be granted for registration or be invalid according to Article 13.2 of the Trademark Law, the People's Court shall consider the interaction of the following elements so as to judge whether confusion may be likely caused:

1. The similarity between the marks 2. The similarity between the goods 3. The distinctiveness or publicity of the trademark claimed to be protected 4. The degree of attention of the relevant public 5. Other related elements The subjective intention and the evidence of actual confusion may be taken as reference when judging the likelihood of confusion.

Article 13 Where a litigant claims a disputed mark as a reproduction, imitation, or translation of of a well-known trademark of another person already registered in China shall not be granted for registration or be invalid according to Article 13.3 of the Trademark Law, the People's Court shall consider the interaction of the following elements so as to judge whether public may be misled and damage may be caused to the interests of the registrant of the well-known trademark:

1. The distinctiveness and publicity of the cited marks 2. The similarity of marks 3. The situation of designated goods 4. The degree of overlapping and attention of the relevant public 5. Marks similar to the cited marks lawfully used by other market entities

Article 14 Where a litigant claims a disputed mark as a reproduction, imitation, or translation of of a well-known trademark of another person already registered in China shall not be granted for registration or be invalid and the claim is supported by the TRAB according to Article 30 of the Trademark Law, the People's Court may apply Art. 30 of the Trademark Law, when the disputed trademark is registered less than five years, while Art. 13. 3 of the Trademark Law, when the disputed trademark is registered more than five years, after listening to the statements of the litigant. 05

May 2017

Article 15 Where the agent or representative of the person who is the owner of a trademark applies, or the agent or representative of the person who is the owner of a trademark in sense of sales agency, applies for registration of a trademark identical with or similar to the trademark in question in respect of the same or similar goods, without authorization, Article 15.1 of the Trademark Law shall apply.

During the discussion of the establishment of the representative relationship, where the aforesaid agent or representative applies for the registration of the trademark, Article 15.1 of the Trademark Law shall apply.

Where certain relationship such as kinship exists between the applicant of a trademark and the agent or representative, it may be concluded that the registration arises from a malicious collusion between applicant and the agent or representative, which is applied to Article 15.1 of the Trademark Law.

Article 16 The following situation may be regarded as "other relationship" in Article 15.2 of the Trademark Law:

1. Kinship between the applicant and the prior user; 2. Labor relations between the applicant and the prior user; 3. The applicant near the business address of the prior user; 4. A failed discussion on achieving agent and representative relationship existed between the applicant and the prior user; 5. A failed discussion on achieving contract and business contact relationship existed between the applicant and the prior user.

Article 17 Where according to Article 16 of the Trademark Law, an interested party of a geographical sign claims a trademark of another person shall not be registered or be invalid and is able to prove the disputed trademark, though used on different goods, would likely mislead the relevant public to mistake the goods as originating from certain region, and thus having certain quality, reputation or other characteristics, such claim shall be supported by the People's Court.

The interested party or the owner thereof may claim his right according to Article 16, or separately to Articles 13 and 30, where the geographical sign is registered as a collective mark or a certification mark

Article 18. The prior right in Article 32 includes civil rights which shall be enjoyed by the litigant before the application date of the disputed trademark and other legitimate rights and interests which shall be protected. Where the prior right no longer exists, when the disputed mark is registered, the registration of the disputed mark shall be maintained.

Article 19 Where a litigant claims his prior copyright is infringed by the disputed trademark, 06

May 2017

the disputed trademark, the People's Court shall investigate whether the object to be claimed constitutes a work, the litigant is the copyright owner or an interested party with the right to claim copyright and the disputed trademark infringes the copyright in accordance with the Copyright Law.

Where a trademark is a work protected by the Copyright Law, all of the manuscript, original copy, contract attaining rights and copyright registration certificates before the application date of the disputed trademark related to the trademark may be the preliminary evidence to prove the copyright ownership.

A Trademark gazette and a certificate of registration may be preliminary evidence to certify the applicant as an interested party with the right to claim the copyright of the trademark.

Article 20 Where the relevant public deem the trademark represent the natural person and is likely to regard the goods with the trademark licensed by or specifically related to the natural person, the People's Court shall consider the trademark infringes the right of name of the natural person when a litigant claims a disputed mark infringes his right of name.

It is supported by the People's Court, where a litigant claims his right of name with particular names, which have certain publicity and establish a stable corresponding relation, such as pseudonym, stage name and translated name.

Article 21 Where a trademark identical with or similar to the trade name with certain publicity in the market claimed by the litigant is filed for registration without the authorization of the owner, and it is likely to cause public confusion on the source of the goods, the People's Court shall support the litigant's claim for prior right.

Where a litigant claims protection for an abbreviation of its enterprise name, with certain market reputation and established stable corresponding relation with the enterprise, it is applied to the previous paragraph.

Article 22 The People's Court shall investigate according to Article 19 of the present Regulations where a litigant claims a trademark infringes his character image copyright.

For a work within the term of protection, where the title of the work, the names of the characters in the work and other elements have relatively high reputation, and the use thereof as a trademark on related goods may mislead the public to a license of and specific connection with the owner of the copyright, the People's Court shall support the litigant's claim on this prior right.

Article 23 Where a prior user claims an applicant registers in an unfair manner a trademark that is already in use by another party and enjoys substantial influence and the applicant knows or shall know the trademark, it may be concluded as "registration in an unfair manner", unless the applicant proves no malicious use of the reputation of the prior mark. 07

May 2017

The People's Court may consider it enjoys substantial influence where the prior user proves the prior mark with continuous use time, religion, sales or advertising.

Where the prior user claims that the applicant files the application for his prior trademark with substantial influence on dissimilar goods in accordance with Article 32 of the Trademark Law, it is not supported by the People's Court.

Article 24 Where the order of the trademark registration is disturbed, public interest is damaged, public resource is occupied unfairly or unfair interest is obtained in a manner rather than fraud, the People's court may consider it as "other unfair means" in Article 44.1 of the Trademark Law.

Article 25 The People's court shall overall consider the publicity of the cited marks, the reasons for application of the applicant of the disputed mark and the actual situation to use the disputed trademark to judge the subjective purpose. Where the cited mark enjoys a highly publicity and the applicant of the disputed mark has no just cause, the People's Court may consider the registration as "Malicious Registration" in Article 45.1 of the Trademark Law.

Article 26 Use by the owner of the trademark right, others with license and other use without violating the will of the owner of the trademark right may be considered as the "use" in Article 49.2 of the Trademark Law.

Nuance in actual use of the trademark and the trademark approved for registration without changing its distinctiveness may be considered as the use of the registered mark.

No actual use of the registered mark only with license or transfer action, or publication of registration information and the claim on the exclusive right to use may not be considered as the use of the registered mark.

Where the owner of the trademark right has real intention and preparation to use the mark yet not using the registered trademark for other objective reasons, the People's court considers the owner with justifiable reasons.

Article 27 It is supported by the People's Court where a litigant claim the following situation is applied to "violation of statutory procedures" in Article 70.3 of the Administrative Litigation Law:

1. Omission of the reasons for review of the litigant, leading to actual influence on the right of the litigant 2. Without notification of the panels during the review procedure, who should be accused with cause after investigation. 3. The qualified litigant who raises an objection for not being informed to participate in the review 4. Other situation violating statutory procedures

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May 2017

Article 28 During the trial of administrative cases concerning decisions of ownership of trademark, where the reasons for TRAB's decisions of refusal, disapproval of registration or invalidation no longer exist, the People's Court may cancel the related decisions and order the TRAB to make decisions again according to changed fact. Article 29 Where the litigant finds new evidence formed after the original administrative action or is unable to attain or provide evidence within prescribed time limit, or file new review application according to new legal basis, it is not re-filing the review application based upon "the same fact and ground". During the procedures of the review of refusal of a trademark, where the TRAB approves the application trademark for preliminary publication for the reason that the trademark applied for registration and the cited mark do not constitute similar or identical marks on similar or identical goods, the following situation is not regarded as filing another review application for "the same fact and ground":

1. Where the owner or interested party of the cited mark files an opposition according to the cited mark and the applicant of the opposed mark applies for a review, it is supported by the TRAB. 2. The owner or interested of the cited mark files a request for invalidation against the application trademark approved for registration according to the cited mark. Article 30 The judgment by the People's Court that comes into effect, has already made clear affirmation on related facts and laws applicable, where the offeree or interested party files a lawsuit against decisions made again according to the aforesaid judgment by the TRAB, the People's Court shall not accept the lawsuit in accordance with law. For those accepted, the court shall have them dismissed. Article 31 This Law shall enter in force on 1 March 2017. Administrative cases concerning decisions of ownership of trademark trialed according to the 2001 Trademark Law may be applied to the present Regulations.

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May 2017 Gang HU

Application of the Doctrine of Stare Decisis to Cases of Well-Known Trademark Recognition

---Broad Protection should be provided for the Market Reputation of the Well-Known Automobile Brand " "

[Case]

(2015) Jing Zhi Xing Chu Zi No. 5098 Case of Administrative Dispute over Trademark Invalidity Announcement between the Plaintiff Automobile Co., Ltd. and the Defendant the Trademark Review and Adjudication Board of the State Administration for Industry and Commerce of the People's Republic of China ("TRAB"), and the Third Party Wuyuan County Yongwang Industry and Trade Co., Ltd.

[Brief Introduction to the Case]

By the reason that its priorly registered trademark " " ("Cited Trademark") had relatively high popularity and influential force, and constituted a well-known trademark after long-term broad use and marketing in China, the Plaintiff XX Automobile Co., Ltd. ("the Plaintiff") complained that the No. 9923074 Trademark " " ("Opposed Trademark") registered by the

Third Party constituted the reproduction and imitation of the Plaintiff's well-known trademark, and theregistration and use of the Opposed Trademark would easily misguide the public and damage the Plaintiff's benefits, so the Plaintiff requested the TRAB to cancel the registration of the Opposed Trademark. The TRAB considered that the Class 19 goods like firebrick, etc. on which the Opposed Trademark was approved to use and the Class 12 goods like vehicles, etc.

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May 2017

Application of the Doctrine of Stare Decisis to Cases of Well-Known Trademark Recognition

---Broad Protection should be provided for the Market Reputation of the Well-Known Automobile Brand " "

on which the Opposed Trademark was approved to use and the Class 12 goods like vehicles, etc. on which the Cited Trademark was approved to use had distinctive differences in terms of function, use, consumption object, sales channel, etc. Therefore, the Opposed Trademark would not misguide the public or damage the Plaintiff's lawful rights and interests, and it did not constitute the reproduction and imitation of the Plaintiff's Cited Trademark, so the TRAB maintained the registration of the Opposed Trademark. The Plaintiff was not satisfied, and lodged a complaint to Beijing Intellectual Property Court.

In the court hearing, the Plaintiff cited two prior legal precedents in which the recognition of well-known trademarks was involved, but different judgment conclusions were drawn, and considered that: 1) The three basic conditions for application of the provisions of Article 13.2 of the Trademark Law to administrative cases of trademark right authorization and confirmation are that, prior Cited Trademark is a well-known trademark registered in China; the Opposed Trademark constitutes the reproduction, imitation or translation of this well-known trademark; the application for registration of the Opposed Trademark would easily induce consumers' confusion or misguide the public, and thus damage the benefits of the objection applicant. 2) All the above-mentioned conditions are necessary and insufficient conditions, and the lack of any condition could deny the application of this article. 3) The well-known degree of a trademark would affect the recognition of other conditions, so when it's impossible to surely deny other conditions, we shall firstly judge whether the trademark has reached well-known state first.

The Court supported the Plaintiff's above-mentioned reasons for dispute after trial, recognized that the Plaintiff's priorly registered trademark " " constituted awell-known trademark, and hereby requested the Defendant to make a new decision on the request for trademark invalidity announcement and invalidate the registration of the Third Party's No. 9923074 Trademark " " under Class 19 goods like

firebrick, etc.

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May 2017

Application of the Doctrine of Stare Decisis to Cases of Well-Known Trademark Recognition

---Broad Protection should be provided for the Market Reputation of the Well-Known Automobile Brand " "

[Abbreviature of Adjudication]

1. To judge whether an opposed trademark constitutes the circumstances regulated in Article 13.2 of the Trademark Law 2001, we shall firstly ascertain whether the trademark requesting protection has reached well-known state in principle. Where the opposed trademark does not obviously constitute the reproduction, imitation or translation of the cited trademark, or it's available to confirm from the factors such as the relevance degree of goods that the result that the opposed trademark is approved to register will not induce the result of misguiding the public and possibly damaging the benefits of the cited trademark right holder, then it will be unnecessary to examine and recognize whether the cited trademark constitutes a well-known trademark. 2. The Plaintiff's Cited Trademark constitutes a well-known trademark. The registration of the Opposed Trademark uses the market reputation of the well-known trademark, occupies for free the benefits and achievements of the popularity obtained by the Plaintiff after great effects and plentiful investments, weakens the inherent connection between the Cited Trademark and the goods provided by the Plaintiff in the mind of relevant public, thus weakens the distinctiveness of the well-known trademark and damages the benefits of the

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May 2017

Application of the Doctrine of Stare Decisis to Cases of Well-Known Trademark Recognition

---Broad Protection should be provided for the Market Reputation of the Well-Known Automobile Brand " "

Plaintiff as the well-known trademark right holder. Therefore, the application for registration of the Opposed Trademark violates the provisions of Article 13.2 of the Trademark Law 2001.

[Typical Significance]

This case was appraised and elected by Beijing Intellectual Property Court to be one of typical cases at the 2nd anniversary for its foundation. Beijing Intellectual Property Court considered that, the typical significance of this case rested with: the recognition sequence of the composition elements of the well-known trademark at issue, and the issue concerning the cross-class protection scope of the well-known trademark. The Plaintiff carried out analysis by citing two judgments giving different conclusions, namely (2015) Zhi Xing Chu Zi No. 112 Administrative Judgment of the Supreme People's Court, and (2011) Gao Xing Zhong Zi No. 630 Administrative Judgment of Beijing Higher People's Court. Under the circumstance that there was no definite regulation in law, and the two effective judgments of the superior courts were not completely the same, Beijing Intellectual Property Court extracted the rules for the well-known trademark recognition sequence and applicable standards from the two prior cases, and effectively protected the lawful rights and interests of the owner of the well-known trademark having higher well-known degree.

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May 2017

Hui GAO

Consideration of Malicious Intentions of Trademark Applicant in Protection of Prior Used Trademark

---Prior used famous air purifier brand IQAir obtains protection from People's Court of China

[Case]

(2015) Jing Zhi Xing Chu Zi No. 2774 Case of Administrative Dispute over Trademark Invalidation between the Plaintiff XXX Enterprise, the Defendant Trademark Review and Adjudication Board of the State Administration for Industry and Commerce of the People's Republic of China ("TRAB") , and the Third Party XXX Co., Ltd.

[Brief Introduction to the Case]

Based on the grounds that that the Third Party's trademark "IQ Air" ("Disputed Trademark") is

preemptive registration by improper means of the Plaintiff's trademark IQAir, which is prior

used and has certain influences on air purifiers, etc., the Plaintiff XXX Enterprise requested

the TRAB to cancel the registration of the Disputed Trademark. The TRAB held that the

evidence submitted by XXX Enterprise are not sufficient to prove that before filing date of the

Disputed Trademark, XXX Enterprise had prior used trademark similar to the Disputed

Trademark and obtained certain influences on the products identical or similar to the goods

covered by the Disputed Trademark. Therefore, the TRAB maintained the registration of the

Disputed Trademark. XXX Enterprise was not satisfied with the decision, and appealed to

Beijing Intellectual Property Court.

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May 2017

Consideration of Malicious Intentions of Trademark Applicant in Protection of Prior Used Trademark

---Prior used famous air purifier brand IQAir obtains protection from People's Court of China

In the appeal, XXX Enterprise submitted evidences proving prior use of the trademark IQAir on air purifiers in China before the filing date of the Disputed Trademark, and meanwhile emphasized that, 1) Whether a prior used trademark has certain influences and if the applicant of a Disputed Trademark has malicious intentions are two necessary conditions in deciding whether the Disputed Trademark constitutes the preemptive application for registration by improper means of a trademark having been prior used and having certain influences; 2) where the applicant of the Disputed Trademark has obvious malicious intentions, then the trademark used in China and known by relevant public within a certain scope shall be recognized as a trademark already used and having certain influences; 3) firstly, the Third Party in this case filed trademark applications identical with other foreign famous air purifiers brands on the same day when filing the Disputed Trademark, and has been continuing filing such trademarks till now; secondly, both the Third Party and XXX Enterprise are manufactories of the products like air purifiers, etc., and the Third Party paid sustained attention to the enterprises with certain pop-ularity in the same industry and their brands; and thirdly, the Third Party alleged that her brand was "Swiss Brand" in promotion for many times, while most of XXX Enterprise's IQAir air purifies were manufactured in Switzerland. The above facts could sufficiently prove the Third Party's malicious intention in filing the Disputed Trademark.

The Court supported the Plaintiff's abovementioned grounds, recognized that the application

for the Disputed Trademark on the products "air conditioning equipment; air sterilizers; air

purification devices and machines; air deodorizing apparatuses" constituted the pre-emptive

registration by improper means of another person's trademark already used and having

certain influences, as stipulated in Article 31 of the Trademark Law 2001, and required the

Defendant to make a new invalidation

decision to cancel the registration of the

Disputed Trademark on the

abovementioned goods.

[Keystone of Judgment]

1. To decide whether the Disputed

circumstance of pre-emptive

registration

Trademark constitutes the by improper means of

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May 2017

Consideration of Malicious Intentions of Trademark Applicant in Protection of Prior Used Trademark

---Prior used famous air purifier brand IQAir obtains protection from People's Court of China

another person's trademark prior used and having certan influences, as re-gulated in Article 31 of the Trademark Law 2001, it should firstly be decided whether the Disputed Trademark and the prior used trademark constitute similar trademarks, and whether the goods covered by the Disputed Trademark and the goods on which the prior used trademark is designated constitute similar goods; and secondly, the trademark actually used in China and known by relevant public within a certain scope shall be recognized as a trademark already used and having certain influences.

2. Where the trademark applicant knows or should have known other person's prior used trademark, but still executes pre-emptive registration of this trademark, this applicant may be recognized to have malicious intention. In this case, under the circumstance of knowing the trademark already used by other person and having certain influences, the Third Party still applies for the registration of a trademark nearly the same as the prior trademark on similar products, and the malicious intentions are obvious. Therefore, the application for the registration of the Disputed Trademark violates the provisions of Article 31 of the Trademark Law 2001.

[Typical Significance]

The typical significance of this case rests with that, this case involves how to comprehensively consider the two elements "whether a trademark is prior used and has certain influences" and "the malicious intentions of the Disputed Trademark applicant" when recognizing whether the Disputed Trademark constitutes pre-emptive application for registration by improper means of a trademark already used by other person and having certain influences. The two elements, namely trademark applicant's malicious intentions and the other party's prior use are interactive. Under the circumstance that the Disputed Trademark applicant has obvious malicious intentions and the trademark already used in China and known by relevant public within a certain scope shall be recognized as a trademark already used and having certain influences.

There are many factors to be considered when judging "other negative influences", and the judgment shall be made comprehensively in combination with concrete situations of the cases. The judgment factors involved in judicial practices include: the trademark itself, the products and services on which the trademark is designated to use, the recognition of relevant public, the general cognition of relevant public, the actual use and market effect of the trademark, a-nd the approval of official institution and authorities, etc. 25

May 2017 Ling ZHAO

Principles of On-Demand Recognition of Well-Known Trad-emarks and Consistent Law Application

---"YKK" Recognized as Well-Known Trademark by the Supreme People's Court

Principles of On-Demand Recognition of Well-Known Trademarks and Consistent Law Application

[Case]

(2016) No. 67 Retrial Judgement of the Supreme People's Court on Case of Administrative Dispute over Review of Trademark Opposition between the Retrial Applicant XX Co., Ltd. and the Respondent the Trademark Review and Adjudication Board of the State Administration for Industry and Commerce ("the TRAB"), the Third Party of First Instance, and the Appellee of Second Instance Rui'an Libo Motorcycle Parts Co., Ltd. ("Libo Company")

[Brief Introduction to the Case]

Libo Company applied to the Trademark Office of China for the registration of the trademark "YKK" on Mar. 23, 2004, and this trademark was designated to use on Class 12 goods "air pumps (vehicle accessories), upholstery for vehicle , automobiles, motor vehicle dampers", etc. XX Co., Ltd. objected this trademark, and considered that this trademark constituted the reproduction and imitation of its trademark "YKK" registered under Class 26 goods like zipper, etc. In December 2009, the Trademark Office made the Decision on the Opposition, and considered that the trademark "YKK" used by XX Co., Ltd. on the goods "zipper" had relatively high popularity, but the goods on which the two parties' trademarks were designated to use had distinctive differences in terms of function and use, etc., so the

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May 2017

Principles of On-Demand Recognition of Well-Known Trademarks and Consistent Law Application

---"YKK" Recognized as Well-Known Trademark by the Supreme People's Court

registration and use of the Opposed Trademark would not cause consumers' confusion on the source of goods generally. XX Co., Ltd. sued to the TRAB for opposition review. In March 2011, the TRAB made the Decision on Opposition Review, and approved the registration of the Opposed Trademark. XX Co., Ltd. was not satisfied with the Decision on Opposition Review, and lodged a complaint to Beijing No. 1 Intermediate People's Court ("Court of First Instance"). The Court of First Instance made a judgment on Dec. 18, 2012, and maintained the Decision on Opposition Review. The Judgment of First Instance considered that the goods on which Opposed Trademark was designated to use and the goods "zipper" on which the trademark "YKK" of XX Co., Ltd. was designated to use had very great differences in terms of function, use, production department, sales channel, consumption object, etc., and relevant public would not generally consider after seeing the Opposed Trademark that this Opposed Trademark had connection with the trademark "YKK" used by XX Co., Ltd. on the zipper goods, so it would not misguide the public and be detrimental to the benefits of XX Co., Ltd. Thereafter, XX Co., Ltd. filed an appeal to B-eijing Higher People's Court ("Court of Second Instance"). The Court of Second Instance dismissed the claims of XX Co., Ltd. after trial. The Court of Second Instance considered that for a well-known trademark already registered in China, its protection scope on non-similar goods shall be determined according to its well-known degree. Where the goods on which a well-known trademark is used and the goods on which the Opposed Trademark is used have by far great differences, the protection scope for this well-known trademark may not be expanded to the goods on which the Opposed Trademark is used.

After losing the lawsuit in the final trial of second instance, XX Co., Ltd. entrusted the CCPIT Patent and Trademark Law Office to start the retrial procedure of this case of administrative lawsuit for this trademark. After hearing procedure and trial procedure, the Supreme People's Court made a judgment beneficial to XX Co., Ltd., and affirmed that the trademark YKK was a well-known trademark used on zipper goods, the goods "upholstery for vehicle" on which Opposed Trademark was designated to use had relatively high relevance with the zipper goods, and the trademark YKK could obtain protection on "upholstery for vehicle" based on the fact that it is well-known on "zipper" goods.

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Principles of On-Demand Recognition of Well-Known Trademarks and Consistent Law Application

---"YKK" Recognized as Well-Known Trademark by the Supreme People's Court

[Abbreviature of Adjudication]

1. The Supreme Court considered that the evidence provided by XX Co., Ltd. in this case is sufficient to prove that zippers can be applied to upholstery for vehicle, and they belong to the relationship of upstream and downstream goods. What's more, "YKK" is a fabricated word, and has relatively strong distinctiveness. Under the circumstance that the trademark YKK has very high popularity on zipper goods, based on the relationship of upstream and downstream goods between "upholstery for vehicle" and "zipper", it is available to recognize that they had relatively strong commodity relevance.

2. In addition, before the judgment of second instance in this case was made, the Court of Second Instance recognized that the trademark YKK had reached the well-known degree in both (2012) No. 1236 Final Judgment of the Higher People's Court on Administrative Dispute Cases and (2013) No. 482 Final Judgment of the Higher People's Court on Administrative Dispute Cases. The Supreme People's Court considered that the two cases are basically the same as this case in terms of details, so is the evidence in the cases about the well-known state of relevant trademarks, and in the precondition of persisting with the principle of consistent law application standard, the judgment of second instance of this case shall provide corresponding cross-class protection for the trademark YKK based on its well-known degree. There are many differences in the concrete circumstances of trademark examination, and the examination on individual cases of trademarks has its rationality, but it is improper to give distinctively opposite judgment for this reason in the judgment of similar cases, or it would be difficult to guarantee the explicitation and foreseeability of the rules for application of trademark laws.

[Typical Significance]

The judgment made by the Supreme People's Court in the YKK Case has extremely important significance for making clear to the public the two legal issues, namely the on-demand recognition principle of well-known trademarks and the consistent law application principle. It is requested that, in the cases where the protection of trademark right is provided in accordance with Article 13 of the Trademark Law, the court shall persist with the on-demand recognition principle, instead of surely examining the fact whether the trademark requesting

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Principles of On-Demand Recognition of Well-Known Trademarks and Consistent Law Application

---"YKK" Recognized as Well-Known Trademark by the Supreme People's Court

protection constitutes a well-known trademark first. Where the opposed trademark does not constitute the reproduction, imitation and translation of another person's well-known trademark, or the goods differ greatly, and the opposed trademark will not induce the damage consequences of confusing or misguiding the public, then it will be unnecessary to provide cross-class protection for the well-known trademark, and under such circumstances, it is obviously unnecessary to affirm the fact of well-known trademark. In this case, the Supreme People's Court reaffirms the principle of consistent law application principle, emphasizes "same judgment for same cases", realized judicial justice, effectively protects the rights and interests of the party concerned, guarantees the predictability of law, and strengthens the transparency of law enforcement.

(2014) Jing Zhi Min Chu Zi No. 143 Judgement Of First Instance of Beijing Intellectual Property court on Case of Dispute over Infringement of Exclusive Trademark Use Right between the Plaintiff XX Company and the Defendants Beijing Beinongguoxin Technology Development Co.,Ltd., Weifang Zhongke Agricultural Technology Development Co.,Ltd., Zhang Zhimin and Zhang Dandan

[Brief Introduction to the Case]

The Plaintiff XX Company lodged a complaint to Beijing Intellectual Property Court by the

and so shall assume several and joint liabilities. Zhang Dandan, as the filed operator and actual operator of the infringing website, implemented the complained behavior together with the other Defendants through work division and cooperation, and shall also assume infringement responsibilities together with other Defendants.

The Court held that, from 2012 to the date when the Plaintiff lodged a complaint in this case, the Plaintiff's trademarks " " and "MOBIL" constituted well-known trademarks used on lubricant oil goods. Both the complained goods and the Plaintiff's lubricant oil goods belonged to chemicals, they had certain degree of relevance, and the use of Infringing Trademarks would induce the legal consequence of cross-class confusion among some of relevant public. Meanwhile, the lubricant oil goods on which the Plaintiff's well-known trademarks are used will possibly be applied to household goods like cars, etc. with ordinary social public as consumers, while the relevant public using the complained goods like fertilizers and pesticides, etc. are also covered in the ordinary social public, so the relevant public of the complained goods have cognition with the trademarks "MOBIL" and " " on lubricant oil. In consideration that " " belongs to a fabricated Chinese phrase, and after use, "MOBIL" and " " have formed corresponding relationship and have had very high popularity, so under such circumstances, the use of Infringing Trademarks would induce the legal consequence that the distinctiveness of the Plaintiff's well-known trademarks is diluted.

Finally, the Court judged that the four Defendants should assume several and joint liabilities for the damages and reasonable expenditure of RMB4,500,000 claimed by the Plaintiff.

[Abbreviature of Adjudication]

1. The Plaintiff claimed for damages based on its exclusive right to use well-known trademarks. The use of Infringing Trademarks will possibly induce the legal consequences of not only the cross-class confusion of relevant public, but also the dilution ofthe distinctiveness of the Plaintiff's well-known trademarks. The generation of confusion surely means that each

Defendant improperly uses the popularity of the Plaintiff's trademarks, and the generation of dilution means the devaluation of the Plaintiff's trademarks, so the complained behavior will not only bring about losses to the Plaintiff, but also bring about benefits to the Defendant. Therefore, even though the Defendants did not use the complained trademarks on lubricating oil goods, each Defendant shall still assume the responsibility to compensate the Plaintiff for their complained behaviors.

2. Based on the fact that the Defendants alleged they ranked among the Top 100 Pesticide Enterprises in 2009, Top 50 Pesticide and Insecticide Enterprises in China in 2010, as well as the Top 50 Pesticide (Insecticide, Bactericide, Herbicide) Enterprises in China in 2012 and 2013, it may be presumed that, over the past two years, their annual gross sales of pesticide goods should be more than RMB100,000,000, far more than the compensation amount of RMB4,500,000 claimed by the Plaintiff, and so the Court fully supported the claims.

[Typical Significance]

Beijing Intellectual Property Court considered that, the typical significance of this case rests with that, the on-demand recognition and protection of well-known trademarks shall be considered from the aspects of stopping infringement and compensating losses in civil litigations. Generally, where a trademark registered by the trademark registrant on identical or similar goods is enough to make this trademark registrant obtain the protection which is of the same level as that for a well-known trademark, then it will be unnecessary to provide protection of well-known trademark for the trademark right holder. The protection of the same level shall be considered from at least two aspects, namely stopping infringement and compensating losses. Where the trademark registered by the trademark registrant on identical or similar goods could only stop infringement behaviors, but could not obtain economic compensation, then it shall be recognized that, the trademark registered on identical or similar goods cannot obtain protection of the same level as a well-known trademark, and in line with the on-demand recognition principle, it will be necessary to provide the protection of well-known trademark level for the trademark registrant.

Note: This decision was appealed to Beijing High Court.

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